Weighed Down By Taxes

In budget FY11-12 companies operating in special economic zones (SEZ) and SEZ developers were brought under the purview of minimum alternate tax (MAT). This means that the developers and units operating out of SEZs will now have to pay tax at the rate of 18.5 per cent on their book profits. Further, the dividends declared by SEZ developers will attract a tax of 16.23 per cent. Retrogressive step Many experts have pointed out post-budget that this is a retrogressive step that will discourage companies from setting up units in SEZ zones. In any case, SEZs are fast losing their charm among Indian companies. Slowdown in global trade together with problems in land acquisition has already made SEZs unattractive. As many as 40 SEZ developers, including the like